Tuesday, July 31, 2012

CNN's Carol Costello: 'You Didn't Build That' Taken Out of Context

CNN's Carol Costello: 'You Didn't Build That' Taken Out of Context

via Breitbart Feed on 7/30/12

Reason 16,988 as to why The Most Trusted Name In News is just the opposite:
What CNN's Costello does in that clip is a media trick I call "Matter-Of-Facting."
First off, Costello should not be presenting her misguided opinion as fact. Whether or not the Romney campaign is taking Obama's "you didn't build that" comment out-of-context is, at best, debatable.
Not for a second do I think Obama's being taken out of context. I've been over all of this before, but let me briefly hit it again.
In context, in FULL context, Obama's "you didn't build that" was the least offensive thing he said that day in Roanoke: [emphasis added]
There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn't — look, if you've been successful, you didn't get there on your own. You didn't get there on your own. I'm always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.
That's the text of the paragraph just before "you didn't build that" -- in which we find the President openly mocking those egomaniacal successes who dare think they worked hard and are so gosh-darned smart.
A little later the president says: [emphasis added]
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business — you didn't build that. Somebody else made that happen.
What is the "that" Obama refers to when he says "you didn't build that"?
Taken in FULL context, I have no question he's referring to "business."
After all, "that" is singular. Roads and bridges are plural.
Had Obama said "all that" or "those," he would've clearly meant roads and bridges. But "that" is most certainly the singular "business" Obama refers to just four little words earlier.
So, like I said, it's debatable.
But Carol Costello and The Most Trusted Name In News are obviously done debating and have moved into full-on rescue mode for Obama.  And this is where the "Matter-Of-Facting" I referred to earlier comes into play.  
You see, Obama's in trouble over this comment, and the media questioning whether or not the comment is being taken out of context didn't work to save him. So now the media moves into the next phase of the bailing out of Their Precious One by stating declaratively, as though the matter is settled and not at all controversial, that Romney is taking Obama out of context.
Using a matter-of-fact approach to most anything helps to sell it. When you hear something presented in this way,  the matter-of-factness says the matter is no longer controversial and just the way it is. It's a psychological ploy to not only fool those who aren't news junkies, but also to shut down debate.
If you don't believe me about "Matter-Of-Facting," here are some examples:
CNN sucks.
Carol Costello shills for Obama.
CNN has no integrity.
Carol Costello is smug and sanctimonious.
CNN lies.
I'm telling you, it works.

PJ Media � Ezra Klein’s ‘Facts’ About Guns and Violence Tell a Slanted Story

Link: http://pjmedia.com/blog/ezra-kleins-facts-about-guns-tell-slanted-story/?singlepage=true

Soon after the Aurora mass murder, Washington Post columnist Ezra Klein waded into the fray, citing curious data to “prove” that we need more gun control to make society safer. But what he said and how he said things show he’s just another anti-rights elitist using tragedy to advance his agenda.

Klein displayed bias by claiming that not politicizing the Aurora shooting is only to halt discussing gun control:

The aftermath of the Aurora, Colorado shootings has been thick with calls to avoid “politicizing” the tragedy. That is code, essentially, for “don’t talk about reforming our gun control laws.”

His assumption is code for “the only desirable outcome here is more gun control.” Klein’s politicizing is okay; your desire to have a viable self-defense tool—and not be held accountable for a murderer’s actions—is not.


1. America is an unusually violent country.

Klein supports this assumption by citing a researcher’s graph of assault deaths in Organisation for Economic Co-operation and Development (OECD) countries. By conveniently ignoring most of the dataset, he made it appear that America is much more violent than any other country.

The latest United Nations homicide data show that America tied Argentina for the 50th most violent country, again using murder as an indicator. Like Klein’s graph, this dataset consists of OECD member countries, except for Tajikistan, which had a lower murder rate and didn’t affect our ranking.


2. The South is the most violent region in the United States.

Here’s one fact Klein had right. The FBI divides America into four regions: Northeast, Midwest, South, and West. In 2010, the South accounted for 41.5% of all violent crimes reported to the FBI. But Klein ignores relevant issues to create a simplistic conclusion.

Between 2000-2010, the South experienced a 22.3% decline in its violent crime rate, beating the U.S. decline of 20.3%.

Also, Klein doesn’t account for illegal immigration-related crime, which has a significant impact on southern states like Texas. For example, a 15 year old was charged with nine murders after crashing a van smuggling illegal immigrants near the Mexico border. Fifteen more illegal immigrants died recently when another smuggler crashed his overloaded truck. Minus the dead driver, that’s 23 more murders in Texas this year, all related to illegal immigration.


3. Gun ownership in the United States is declining overall.

Klein cited surveys by the National Opinion Research Center (NORC) and Gallup as evidence that gun ownership is declining in America.

NORC received $300,000 from the Joyce Foundation in 2011. Joyce also gave the Violence Policy Center $500,000, and VPC is proven to manipulate data to advance their agenda. Joyce’s “gun violence” grantees are all demonstrably committed to gun control.

The Gallup survey shows that since 1991, gun ownership declined about 3%. But it also shows that ownership is the highest since 1996. Gallup recently found that support for bans on handguns and semi-automatic rifles reached an historical low.


4. More guns tend to mean more homicide.

Klein cited the Harvard School of Public Health—another Joyce Foundation grantee—which published research concluding that more guns equal more murder. But Centers for Disease Control data show the opposite: States with the highest gun ownership have the lowest murder rates. The graph below shows that right-to-carry states—with more liberal laws empowering citizens to carry handguns in public—average 17.4% lower murder rates than restrictive states.


5. States with stricter gun control laws have fewer deaths from gun-related violence.

To arrive at this conclusion, Klein included suicides. But suicide is not violence. For example, law enforcement doesn’t charge attempted suicides with any violent crime unless there was an assault on another (e.g. murder/suicide).

True, 2001-2002 CDC data show that states with higher firearms ownership have higher firearms suicide rates. But more guns doesn’t always mean more suicide. About 100 million guns were added to the civilian firearms inventory between 1991 and 2009, but the firearms suicide rate declined 17% while non-firearms suicides increased 22%. Using suicide to make a point about firearms-related violence is junk science that ignores the complex dynamics of self-harm.

6. Gun control is not politically popular.

That’s because gun control fails to work as advertised. Since the 1990s, pro-rights writers have been accomplishing top-notch research and getting the word out, resulting in more gun ownership and less stigma attached to being a gun owner.

There are 100 million gun owners of voting age, and they tend to be politically active. For example, many Democrats believe the Clinton gun ban was why Gore lost the presidential election.

Friday, July 27, 2012

Studies: 24 out of 25 Gun Uses for Self Defense, Not Crime

Studies: 24 out of 25 Gun Uses for Self Defense, Not Crime

via Breitbart Feed on 7/26/12

Even after the call for police officers to strike until Americans turn in their guns went viral and Mayor Michael Bloomberg had to say he didn't mean it "literally," he continues his gun control rampage. He has now run a full page ad in USA Today in which he demands President Obama and Gov. Romney create and present gun control plans to the American people.
Here's a curious question: does Bloomberg know that guns are used nearly 25 times more often for self defense than they are for crime?
Seriously, the ratio for self-defense uses versus criminal uses is about 25 to 1, yet Bloomberg and his ilk seem determined to spend all their energy taking away the guns of the 25 defenders rather than punishing the one offender to the full extent of the law.
For those of you interested in the raw numbers, the figures of between 2 million and 2.5 million uses of guns for self-defense annually can be found in studies and reports by John Lott, Gun Owners of America, and the National Rifle Association. These are countered by the use of guns for criminal purposes at a rate of 100,000 to 135,000 times a year.
To be clear, I'm not arguing that we ought to be able to own guns because of a ratio, for we keep and bear arms because it's a God-given right which our Founding Fathers said "shall not be infringed." But the ratio of 25 to 1 is icing on the cake, and it reminds us just how myopic gun-grabbers like Bloomberg can get when they set out to promote schemes that disarm the American people.

‘Military-Style Weapons’ - John R. Lott Jr. - National Review Online

Link: http://www.nationalreview.com/articles/312452/military-style-weapons-john-r-lott-jr (via shareaholic.com)

The police in Aurora, Colo., reported that the killer used a Smith & Wesson M&P 15. This weapon bears a cosmetic resemblance to the M-16, which has been used by the U.S. military since the Vietnam War. The call has frequently been made that there is "no reason" for such "military-style weapons" to be available to civilians.
Yes, the M&P 15 and the AK-47 are "military-style weapons." But the key word is "style" — they are similar to military guns in their aesthetics, not in the way they actually operate. The guns covered by the federal assault-weapons ban (which was enacted in 1994 and expired ten year later) were not the fully automatic machine guns used by the military but semi-automatic versions of those guns.
The civilian version of the AK-47 uses essentially the same sorts of bullets as deer-hunting rifles, fires at the same rapidity (one bullet per pull of the trigger), and does the same damage. The M&P 15 is similar, though it fires a much smaller bullet — .223 inches in diameter, as opposed to the .30-inch rounds used by the AK-47.
The Aurora killer's large-capacity ammunition magazines are also misunderstood. The common perception that so-called "assault weapons" can hold larger magazines than hunting rifles is simply wrong. Any gun that can hold a magazine can hold one of any size. That is true for handguns as well as rifles. A magazine, which is basically a metal box with a spring, is also trivially easy to make and virtually impossible to stop criminals from obtaining.

If we finally want to deal seriously with multiple-victim public shootings, it is about time that we acknowledge a common feature of these attacks: With just a single exception, the attack in Tucson last year, every public shooting in the U.S. in which more than three people have been killed since at least 1950 has occurred in a place where citizens are not allowed to carry their own firearms. The Cinemark movie theater in Aurora, like others run by the chain around the country, displayed warning signs that it was prohibited to carry guns into the theater.

Monday, July 23, 2012

The Media Botches Aurora

Link: http://www.nationalreview.com/articles/310340/media-botches-aurora-robert-verbruggen (via shareaholic.com)

Verbruggen offers five tips for reporters who would cover this sort of incident:

1. Before declaring that gun control is the answer, think of a gun-control policy that actually could have made a difference.
2. Make sure the way your story is framed matches the information in it.
3. Verify facts before reporting them.

Obviously, here I'm referring to ABC's Brian Ross, who the day of the shooting speculated — without making any attempt to verify — that the "Jim Holmes" of Aurora, Colo., who had a Tea Party Patriots website, was the same person as the shooter. As we all now know, these are two different people.
4. Don't forget: A law about where you can take your guns won't stop a pre-planned massacre.
5. If you've heard an anti-gun talking point repeated a million times, look into it before publishing it.

Thursday, July 19, 2012

Book Review: Jonah Goldberg’s “The Tyranny of Clichés”

Book Review: Jonah Goldberg’s “The Tyranny of Clichés”

via Bookworm Room by Bookworm on 7/19/12

It took me a long time to read Jonah Goldberg's latest, The Tyranny of Cliches: How Liberals Cheat in the War of Ideas. This is not because it's a bad or a boring book but, instead, because it's a deep and thoughtful book. I went into reading it expecting a sort of cheerful factual romp, a la his Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning and, instead, got a cheerful philosophical disquisition. After I engaged the higher part of my brain, however, I was able to enjoy and appreciate Jonah's inquiry into the intellectual fallacies that liberals use to claim the moral high ground and shut down serious discourse.

Jonah's premise is a deceptively simple one: Liberals, he says, have a set of clichéd expressions or ideas that they whip out alternately as a shield or bludgeon whenever their policies come under attack. I say "deceptively simple," because most of us, hearing that, will say, "Well, duh! We knew that. Whenever liberals say 'it's for the children,' you know they're trying to raise taxes or lower the age of consent for abortions." That's all true, of course, but Jonah points to numerous more subtle liberal tropes that many of us conservatives, especially those of us who are neo-cons, actually think have substance. They don't. Using his trademark wit and erudition, Jonah telling explains how these expressions are conversational dead-ends, meant to convince conservatives and independents that conservative ideas are small-minded, mean-spirited, greedy, and unkind.

A trip through the book's Table of Contents is instructive, because you can see how many cultural paradigms Jonah attacks. Jonah's first three chapters should be read in one go, since they are intertwined arguments. They are entitled, respectively, "Ideology," "Pragmatism," and "No Labels." They all attack one thing, which is the liberals' self-righteous contention that, while conservatives are blinkered by evil, fascist ideologies, liberals deal with political and social problems in a purely pragmatic way, one that raises them above primitive ideology and demands a "no label" world, in which the liberals' ideology-free pragmatism is given free rein.

You and I have all seen this line of thinking in action. It shows up in news stories that identify a conservative think tank as "a conservative think tank," but just call a liberal think tank "a think tank," thereby implying that the latter is free of ideological bias. Indeed, the whole of our media and academic world is permeated with the assumption that the norm is Left, and deviations from the norm are Right. We understand the concrete reality of this line of thinking, but Jonah takes us on a factual and philosophical journey to appreciate the flawed intellectual thinking that nevertheless is so effective in shutting down debate.

In the "Ideology" chapter, for example, Jonah takes us with him on a journey that covers that appallingly flawed WHO World Health Report 2000; the origins of the entire notion of ideology, which is a fairly recent intellectual construct; Burke and the French Revolution; and the Left's premature 2008 eulogies for conservativism, on the ground that the taint of ideology had met its match in Obama.  This is a lot of ground to cover, especially for someone like me, who is not entirely at home in the world of pure abstractions.  Jonah's delightful writing style lightens the mental burden, but cannot make it go away entirely.

The chapter on Pragmatism (which has as its companion the later chapter on Science) talks about the way American Progressives, since the turn of the last century, have constantly jettisoned tried and true economic, social, and political ideas in favor of an unending stream of behaviors focused on socialist goals. Progressives justify this to themselves, and to intellectual wannabes across America by claiming that their death grip on the sciences (both social sciences and the physical sciences that they bend to social science ends) blesses them with a "pragmatism," that transcends the petty ideology to which middle Americans cling so fiercely (along with their guns and Bibles, of course).

This is not light fare. But by saying so, I do not mean to dissuade you from reading the book. It is to warn you, instead, that even someone with an authorial touch as deft as Jonah's still has to go very deep to excavate and expose the rotten foundations underlying so much modern Leftist thought. I don't regret the effort it took me to read this book, just as I don't regret a vigorous workout. When I'm in process, I'm simultaneously working hard and enjoying myself; and when I'm done, I have the slightly euphoric feel of someone who has accomplished something important and beneficial.

If you're not in the mood for the heavy mental lifting in the first three chapters, skip them and go to the later chapters that focus more on specific expressions, rather than entire oeuvres of Weltanschauung. (And yes, I am very impressed with my ability to use two fairly obscure foreign words in a single phrase.) By doing so, you'll learn how to counter the silly liberal who says that everything conservatives believe is a "slippery slope" leading to an American Taliban; that liberal political policies advance the amorphous cause of "social justice;" that ours is a "living constitution" when liberals want judges to interpret it their way, but a sacred, untouchable document when conservatives suggest the amendment process; that "youth" is truth; or that all of the Western world's ills begin and end with the Catholic Church.

Along the way, you'll run headlong into delightful witticisms that had me laughing aloud. For example, in the chapter entitled "Spiritual But Not Religious," Jonah tackles the fatuous lefties who claim that approaching an abstract God through a structured, moral doctrine is stupid and dangerous, but that communing with crystals and worshipping Gaia is an act of spiritualism that makes them much more sophisticated than mouth-breathing church-goers. Or, as Jonah said
I love having conversations with people who deride organized religion as so much superstition and magic, but who don't have any problems with superstition and magic when it is disorganized.
Jonah's formulation is a much wittier, deeper statement than my trite "wishes are the atheist equivalent of prayers." As I told Jonah when I met him, I consider him to be the smarter, better-informed version of my brain.

As you read the book, please pay special attention to the chapter on the "Middle Class," because it dovetails so perfectly with the current campaign and, even more, with Obama's fateful statement that "If you've got a business — you didn't build that. Somebody else made that happen." When Liberals aren't bloviating about doing things "for the children," they're assuring us that all of their policies will save the Middle Class – a conveniently moving target, the center of which happens to be wherever a liberal policy drops the most taxpayer money. To the extent those policies occasionally drop hard cash in the laps of those who actually do work and strive, however, Jonah points out that it's not a good thing. Easy money destroys people's innate ability to build and do and make things happen. (In this regard, you might also want to read John McWhorter's Losing the Race: Self-Sabotage in Black America, which points out that it's probably no coincidence that black families began to implode precisely when well-meaning Great Society social workers headed out to black communities to urge them to get on welfare because the white government "owed" it to them.) Says Jonah:
The problem with the contemporary liberal approach is that it amounts to middle-class welfare. Not only can we not afford it economically, the middle class cannot afford it morally. To miss out on the opportunity to cultivate the [Adam] Smithian virtues is to eat the seed corn of social capital. Liberals to be sure don't see it that way. They see it as an effort to make life easier, to expand the realm of "positive liberty" that John Dewey envisioned and FDR hoped to implement with his "economic bill of rights." Here's Nancy Pelosi explaining how the Affordable Care Act (i.e., ObamaCare) would stimulate the economy: "We see it as an entrepreneurial bill, a bill that says to someone: 'If you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care. You won't have to be job locked.

Never mind that the causal link between socialized medicine and entrepreneurism is not exactly firmly established. The larger point is that the liberal vision of an advanced society is one where it is finally rich enough to liberal the middle class from their comfortable bourgeois lifestyles and to subsidize their conversion to bohemian ones. [snip] In other words they are going to win their centuries'-old war on the middle class by subsidizing the bohemian lifestyle to the point where it no longer pays to be bourgeois. It probably won't work in the long run. But in the short run, it will bankrupt us all, not only financially, but morally as well. (p. 203.)

Some Thoughts on Obamacare, Part II

Link: http://www.thefreemanonline.org/headline/some-thoughts-on-obamacare-part-ii/ (via shareaholic.com)

One likely result of mandating the purchase of health insurance is that insurance companies will start to raise rates. Simple economics tells us that if the demand rises, so will the price, even if that demand is enforced by the IRS. In addition, the rule that insurers cannot decline coverage to customers with preexisting conditions (and must charge the healthy and the sick the same price) will drive up insurance costs. Such customers represent definite expenditures that insurers will have to make, and the addition of such customers to the insurance pool will force insurers to raise rates to cover those expenditures. We have already seen this in advance of the provision becoming law.
A side prediction here is that what counts as a "preexisting condition" will slowly expand over time, since once the definition is in the government's hands, the incentive for patient/customers and the medical providers who will receive payment to lobby for the inclusion of particular conditions will be huge. The Americans with Disabilities Act's constant expansion is instructive here and will likely serve as the legal basis for expanding the definition of a "condition."

Such controversies will continue and get progressively uglier. The problem with mandates and the socialization of costs is that there is no "exit" option for peacefully settling disagreements by tolerating other people's choices. For example, if I am a religious conservative who doesn't like that JC Penney used same-sex couples in their advertisements, I am free to "exit" my relationship with it by shopping elsewhere. I can accept that some will buy from Penney, but I need not. Mandatory minimum coverage means that anyone who objects to the politically determined minimum has no option other than to use the political process to try to change it. Those battles will be ugly and will drive up costs.

Wednesday, July 18, 2012

Renewable energy can't meet demand for electricity

via PrairiePundit by Merv on 7/16/12

Robert Bryce:
It's summer. It's hot. And once again, we are hearing from the usual suspects that we must change our entire way of living. Repent, they say. Carbon dioxide emissions are killing Mother Earth. Give up hydrocarbons and embrace renewable energy. 

Doing so, we're assured, will result in a gentler climate and myriad other benefits, including scads of "green" jobs. Sounds easy, no? 

Alas, no matter how much they may wish it to be so, the proponents of alternatives -- and better yet, "clean" energy -- cannot overcome the problem of scale. A simple bit of math shows that even with the rapid expansion that solar and wind-energy capacity have had in the past few years, those two sources cannot even meet incremental global demand for electricity, much less make a dent in the world's insatiable thirst for coal, oil, and natural gas. Indeed, had any of the myriad advocates for renewable energy bothered to use a simple calculator, they would see that their favored sources simply cannot provide the vast scale of energy needed by the world's 7 billion inhabitants, at a price that can be afforded. 

Consider this: between 1985 and 2011, global electricity generation increased by about450 terawatt-hours per year. That's the equivalent of adding about one Brazil (which used 485 terawatt-hours of electricity in 2010) to the electricity sector every year. And the International Energy Agency expects global electricity use to continue growing by about one Brazil per year through 2035. 

How much solar would be needed to produce 450 terawatt-hours per year? Well, Germany has more installed solar-energy capacity that any other country, with some25,000 megawatts of installed photovoltaic panels. In 2011, those panels produced 18 terawatt-hours of electricity. Thus, just to keep pace with the growth in global electricity demand, the world would have to install about 25 times as much photovoltaic capacity as Germany's total installed base, and it would have to do so every year. 

Let me repeat that: just to meet the world's increasing demand for electricity -- while not displacing any existing electricity-production facilities -- the world would have to install about 25 times as much photovoltaic capacity as what now exists in Germany. And it would have to achieve that daunting task every year. 

The scale problem is equally obvious when it comes to wind. In fact, wind-energy's scale problems are even more thorny because wind energy requires so much land.
There is much more.

It is not going to happen even if Obama spent the whole budget on this fantasy.  The current solar and wind generation capacity is just to inefficient and inconsistent to merit that kind of investment, if we had the money.  Natural gas is going to be the dominant fuel of the future right now.

Tuesday, July 17, 2012

Ice and Economics

Link: http://www.thefreemanonline.org/headline/ice-and-economics/ (via shareaholic.com)

Profit (and loss) leads to innovation. Earning a profit is akin to being rewarded for doing something good. Suffering a loss is the opposite, a punishment for doing something wrong. In this case, the deed being done is the attempt to allocate scarce resources to where their will earn their highest return. People who successfully do this are rewarded with monetary gain, which we call "profit." People who fail to do this experience what we call "loss." In doing so, economic actors learn what works and what does not. Reducing the profitability of an activity through taxes or legislation or sheltering people from losses, therefore, acts to retard this learning process and stifles innovation.

Friday, July 13, 2012

The Real Damage Done by High Tax Rates

President Obama has once again put the question of income tax rates on center stage. As a Wall Street Journal headline put it, "Obama Intensifies Tax Fight." He is apparently hell-bent on making our income tax structure more progressive.

Raising tax rates on upper-income earners is an appealing idea to many people. The President certainly hopes that it is. The most common argument against the idea is that it would diminish the incentive for business owners to invest, hire, and grow their businesses. Although that is all too true, it's only one kind of damage done by high marginal tax rates. Even if we were not in a recession, more tax progressivity would still be a bad idea.

It's well known that taxes reduce economic effort. If you want less of something, tax it. That, by itself, reduces wealth creation and economic growth. Less well recognized, however, is that high tax rates misdirect and misallocate economic activity.

A flatter, less progressive income tax rate schedule is an idea that never seems to go away. Perhaps the earliest argument for a flat tax was in Milton Friedman's 1962 classic, Capitalism and Freedom. Its latest sighting is in what's called the "Ryan Budget" authored by Congressman Paul Ryan. The official name for his budget plan is "The Path to Prosperity: Restoring America's Promise." His proposal advocates only two federal personal income tax rates -- 10 and 25 percent. A notable and similar recommendation was part of President Obama's own deficit reduction team of Erskine Bowles and former senator Alan Simpson. Their "National Commission on Fiscal Responsibility and Reform" recommended federal rates of 8, 14, and 23 percent. Obama totally ignored the Bowles-Simpson recommendations.

High marginal tax rates reduce wealth creation in more ways than is immediately obvious. High tax rates not only reduce incentives overall, they also alter and rearrange incentives. Most of the damage done by excessively high tax rates is hidden from view and almost impossible to measure precisely. Although hidden, the damage is real and significant.

Our wealth is as much dependent on how efficiently we use resources as it is on the quantity of resources we have. The worst damage done by high tax rates is the way they distort decisions in the economy and result in a misallocation of resources.

Higher taxes increase the effort expended in avoiding taxes. When you increase the reward for avoidance, you will get more avoidance. It will follow as the night the day. More decisions will be determined by tax considerations. The result is a less productive economy.

Investing is a process of choosing among alternatives. A generalization that is true in most cases is that money and effort go to where they are most rewarded (or more precisely, where there is the best risk-reward ratio). Different rates of returns attract or repel investment capital.

An economy functions most efficiently and experiences the highest possible growth when resources move to their highest-valued uses. That is the natural tendency in a free market economy. High tax rates, however, significantly distort this tendency. Too often resources move not to where they create the highest economic value, but to where they result in the most tax avoidance. High tax rates reduce the reward for productive spending and increase the reward for wasteful spending. If the tax minimizing choice is the most economically productive it's a happy accident, and a rare one.

High rates make avoiding the tax an option with a very high rate of return. The higher the tax rate the greater the effort expended to avoid them, the greater the misdirection of economic decisions, and the greater the loss to economy and all its participants. High tax rates result in "overinvestment" in tax avoidance. Overinvestment in one activity means reduced investment elsewhere.

High tax rates also reduce the price or "opportunity cost" of leisure. You could define leisure as wealth non-creation. There's nothing inherently wrong with choosing more leisure, but it does cost something in terms of output. The higher the tax rate, the lower the price of leisure. More leisure means less wealth creation. High tax rates are equivalent to a subsidy for leisure. Is that really something we want to do? Have we made a policy choice that people work too hard?

ONE CLEAR EXAMPLE of taxes distorting economic choices is the tax on capital gains. The capital gains tax is due only when the gains are "realized." In other words, only when the appreciated asset someone owns is sold. In most cases the choice to sell something is controlled by the owner. The capital gains tax is the closest thing we have to a voluntary tax, at least in regard to timing.

The voluntary characteristic of the tax on capital gains is why such taxes are especially sensitive to changes in rates. Even more than is the case with other taxes, revenue from changes often move contrary to the changes in rates. Capital gains taxes are the easiest tax to avoid or at least to postpone. In the past whenever capital gains taxes have been reduced there is invariably an increase in the turnover rate of investments and, therefore, many more "realized" gains and increased tax revenue.

There are millions of assets people would like to sell but don't because they do not want to trigger the tax. Among other things, this prevents people from diversifying their investments as much as they would prefer. Many people have most of their wealth concentrated in one or two assets. Diversification is far and away the most effective way to reduce risk. Consequently, the tax on capital gains results in people bearing an undesired amount of risk.

When tax rates are raised there is almost never a proportional increase in government revenue. Why not? To understand why, it helps to remember that ours is mostly a voluntary exchange economy. Although taxes are not voluntary, the economic transactions you enter into are.

Taxpayers in the top brackets have the most flexibility in how they arrange their incomes, where they reside, and how they invest. This week we learned that the billionaire Denise Rich has renounced her U.S. citizenship in order to avoid U.S. income and estate taxes. In May, Facebook co-founder Eduardo Saverin renounced his citizenship for what many consider the same reasons. Now, rather than getting, for example, 35 percent of these peoples' incomes and estates, our federal and state treasuries will get zero. California and New York, two states with top income tax rates over ten percent, have experienced out-migration of upper income residents in recent years.

A friend of mine is a chemical engineer for a large biotech firm. For several years he spent much of his time in Singapore overseeing the construction of a major new research and production facility there. When I asked him why the decision was made to build it there rather than the U.S., he answered even before I finished my question: "Taxes."

Over-investment in tax avoidance is magnified in an environment of tax complexity. Every serious proposal for a flatter income tax schedule has also included tax simplification and the elimination of tax loopholes. Lower rates and a broader base -- you can't have one without the other. It was such a combination that was central to the tax reform President Reagan successfully passed in 1986. Reagan reduced the top income tax bracket from 70 percent to 28 percent. What followed was an extended period of robust economic growth.
A flatter tax rate schedule would increase productivity and economic efficiency. We would all be better off, not just "millionaires and billionaires." President Obama, however, is far more focused on punishing the rich than he is in growing the economy.

Obama wants the top federal tax bracket to increase from 35 percent to 39.6 percent, the capital gains rate to increase from 15 percent to 20 percent, and the estate tax rate to increase from 35 percent to 45 percent. Buried in Obamacare's 2,500 plus pages is a totally new 3.8 percent tax on all "unearned income," which includes interest and dividends from investments, income from rental property, and the sale of single family homes. In other words, if Obama gets his way the top marginal rate will increase from 35 percent to 43.4 percent. That would have a poisonous impact on the economy.

Mitt Romney, on the other hand, wants a top income tax rate of 28 percent, the capital gains rate to be zero for incomes below $200,000, complete repeal of the estate tax, and a complete repeal of Obamacare.

The battle lines have been drawn. May lower rates and the economy be the victors!

Matthew Schoenfeld: Air Jordan and the 1% - WSJ.com

Link: http://online.wsj.com/article/SB10001424052702303649504577492300632472284.html?mod=djemITP_h (via shareaholic.com)

First, some historical perspective.
"From the time of Pericles until the end of the 18th century in London—2,300 years," notes Harvard Prof. Lawrence Summers, "standards of living on Earth increased perhaps 100%." In the U.S. since 1790, by contrast, real per capita gross domestic product has increased nearly 4,000%. Quality of life, in other words, increased 40 times more in 220 years of American history than it had globally over two millennia. In 2012, a typical American in the bottom fifth of the income distribution has a far higher quality of life—and life expectancy—than the average member of the top 1% in 1790.

The No. 33, and the surprisingly bipartisan art of repeal � Hot Air

Link: http://hotair.com/archives/2012/07/11/the-no-33-and-the-surprisingly-bipartisan-art-of-repeal/

The fact is this is only the second vote on total repeal, the first one coming in January of 2011 after Americans elected a wave of 63 new Republicans to, you know, repeal ObamaCare. Both votes for full repeal, in 2011 and 2012, were more bipartisan than the vote to pass ObamaCare, with three and five Democrats crossing over to the Republican side, respectively. And, I know we all love when we can work together, across the aisle, to get things undone. Beyond that, many of the votes on the Washington Post's list feature far more Democratic defectors to the anti-ObamaCare side than the other way around.
The figure 33, of course, includes all sorts of bills that were only tangentially about ObamaCare repeal, or tweaked small parts of the bill, often with Democratic endorsement and votes. It includes several bills passed with hard-fought compromise later signed by Obama, like the debt-ceiling deal, and other bills that accomplished Obama's legislative goals, such as the payroll tax cut extension bill.
So, are the House's machinations futile and extreme?

Wednesday, July 11, 2012

Arthur C. Brooks

Link: http://arthurbrooks.aei.org/ (via shareaholic.com)

Only free enterprise encourages and allows each of us to define our destiny and earn our success. Only free enterprise encourages true fairness based on merit and opportunity. And free enterprise is the only system that can lift up the vulnerable and those who have fallen on hard times by the millions—by rewarding entrepreneurship and encouraging charity.

These three principles — earned success, true fairness and helping those in need — are the foundation of the moral case for free enterprise.

“The Road to Freedom” is the blueprint for defending free enterprise against the powerful forces of big government. This site will take your learning beyond the book so you can join us on the front lines of this critical movement.

More tenuous claims about Romney-era Bain - The Washington Post

Link: http://www.washingtonpost.com/blogs/fact-checker/post/more-tenuous-claims-about-romneys-bain-capital-record/2012/07/10/gJQAZmKDbW_blog.html (via shareaholic.com)
Mitt Romney the businessman. Take a look at his record. Romney bought companies; drowned them in debt; many went bankrupt; thousands of workers lost jobs, benefits and pensions. But for every company he drove into the ground, Romney averaged a $92 million profit."
— Voice-over from Priorities USA Action ad attacking GOP presidential candidate Mitt Romney

"14,000 workers laid off."
— Text from Priorities USA Action ad
Three Pinocchios by WP fact checkers.

Tuesday, July 10, 2012

German Solar Subsidies to Remain High with Consumers Paying the Price

Link: http://www.spiegel.de/international/germany/german-solar-subsidies-to-remain-high-with-consumers-paying-the-price-a-842595.html (via shareaholic.com)

...Photovoltaic power plant operators and homeowners with solar panels on their rooftops are expected to pocket around €9 billion ($11.3 billion) this year, yet they contribute barely 4 percent of the country's power supply, and only erratically at that.
When night falls, all solar modules go offline in one fell swoop; in the winter, they barely generate power during the daytime. During the summer, meanwhile, they sometimes generate too much power around midday, without enough storage capacity to capture it all. The distribution network is also not laid out in a way that would allow the country's thousands of owners of photovoltaic arrays -- a term used to denote an installation of several panels working together -- to feed into the grid as well as draw power from it.
To keep the lights on, Germany ends up importing nuclear power from France and the Czech Republic.

Monday, July 09, 2012

Getting Religion Back into Our Economic Lives - Interview - National Review Online

Link: http://www.nationalreview.com/articles/304964/getting-religion-back-our-economic-lives-interview?pg=1 (via shareaholic.com)

‘Can it be mere coincidence that we are beset by decline just as the Judeo-Christian worldview has retreated from the public square?” Fr. Robert A. Sirico asks in his new book, Defending the Free Market: The Moral Case for a Free Economy. The president of the Michigan-based Acton Institute for the Study of Religion and Liberty, Fr. Sirico asks the question in a chapter titled “The End of Freedom?” He argues that “the link between economic liberty and public morality is not tenuous; it is clear and direct.” And he talks a bit about what he means in an interview with National Review Online’s Kathryn Jean Lopez.

A Skeptic Looks at Alternative Energy - IEEE Spectrum

Link: http://spectrum.ieee.org/energy/renewables/a-skeptic-looks-at-alternative-energy/0 (via shareaholic.com)

Without these subsidies, renewable energy plants other than hydroelectric and geothermal ones can't yet compete with conventional generators. There are several reasons, starting with relatively low capacity factors—the most electricity a plant can actually produce divided by what it would produce if it could be run full time. The capacity factor of a typical nuclear power plant is more than 90 percent; for a coal-fired generating plant it's about 65 to 70 percent. A photovoltaic installation can get close to 20 percent—in sunny Spain—and a wind turbine, well placed on dry land, from 25 to 30 percent. Put it offshore and it may even reach 40 percent. To convert to either of the latter two technologies, you must also figure in the need to string entirely new transmission lines to places where sun and wind abound, as well as the need to manage a more variable system load, due to the intermittent nature of the power.

The matter of affordable costs is the hardest promise to assess, given the many assorted subsidies and the creative accounting techniques that have for years propped up alternative and renewable generation technologies. Both the European Wind Energy Association and the American Wind Energy Association claim that wind turbines already produce cheaper electricity than coal-fired power plants do, while the solar enthusiasts love to take the history of impressively declining prices for photovoltaic cells and project them forward to imply that we'll soon see installed costs that are amazingly low.
But other analyses refute the claims of cheap wind electricity, and still others take into account the fact that photo­voltaic installations require not just cells but also frames, inverters, batteries, and labor. These associated expenses are not plummeting at all, and that is why the cost of electricity generated by residential solar systems in the United States has not changed dramatically since 2000. At that time the national mean was close to 40 U.S. cents per kilowatt­-hour, while the latest Solarbuzz data for 2012 show 28.91 cents per kilowatt-hour in sunny climates and 63.60 cents per kilowatt-­hour in cloudy ones. That's still far more expensive than using fossil fuels, which in the United States cost between 11 and 12 cents per kilowatt-hour in 2011. The age of mass-scale, decentralized photovoltaic generation is not here yet.

Short, sharp and to the point

Link: http://www.mercatornet.com/conjugality/view/10925 (via shareaholic.com)

Same-sex marriage and related claims, such as adoption of children, are fast becoming flavour of the month among Western politicians. Irish pollies are among the latest, so the family-oriented Iona Institute has prepared an excellent, short,briefing paper on the subject.
Iona's director, David Quinn, introduces the brief, noting that "even people who are instinctively uneasy about the matter ask themselves, 'what harm would it do?'" He continues:
This is to imply that unless a change to the institution of marriage directly harms yourmarriage, there is nothing to worry about. Of course, it could equally be asked what direct harm it would do your marriage if your Muslim neighbour (say) could have more than one wife?

But the harm it would do is to the institution of marriage itself and to its chief purpose which is to commit men and women to one another and to their children. Permitting same-sex marriage would say this is no longer the purpose of marriage at all.

The purpose would be transformed into something else, namely recognising adult sexual love first and foremost (of whatever kind). Sexual complementarity and the children only it can produce would no longer be seen as in any way connected to the core purpose of marriage.

In other words, we would no longer have any institution that aims to bind (insofar as this is possible) mothers and fathers to their children. Redefining marriage would be a declaration that this is no longer a goal of either  marriage or of society.

This is the harm same-sex marriage will do; it will utterly transform the most pro-child of all social institutions into something else.

The Iona Institute has prepared this very short, easily digestible briefing note on the subject. We urge you to read it and share it. Unless we take the attempt to redefine marriage seriously enough and know how to argue against it, the battle will be lost before it begins.
I recommend following this advice.

Friday, July 06, 2012

Say No To Socialism � Romania’s 20-Year Nightmare: Unraveling Socialized Health Care

In my other life in Communist Romania, I managed a large intelligence organization that, among other tasks, was charged with keeping alive a nationalized health care system which in the end bankrupted the country and generated popular contempt. That system, very similar to the Affordable Health Care for America Act, was a bureaucratic nightmare. And it still is a nightmare in the former Soviet empire.

There is no better way to visualize the eventual disaster that a nationalized health care system can generate than to watch The Death of Mr. Lazarescu. This movie was inspired by the heartbreaking true story of Constantin Nica, a real retired Romanian engineer who had the misfortune of growing old in a country that still maintained a nightmarish government health care bureaucracy twenty years after its last Communist dictator was gunned down by his own people.
The movie’s script follows the fictional Mr. Lazarescu as a Romanian government ambulance shuttles him from one government-owned hospital to the next. At the first three hospitals, although the doctors determine that he does need surgery, the government bureaucracy refuses to take him in because he is too old and does not have enough money to give baksheesh to the hospital personnel. Mr. Lazarescu stubbornly refuses to give up, but at the fourth hospital, the evil bureaucrats win — he dies after a delayed and botched surgery. (The real Mr. Nica was in fact dumped by an ambulance onto a park bench and left there to die.) Mr. Lazarescu’s real enemy was not his illness, but the uncaring and authoritarian attitude so deeply ingrained in bureaucratic practice. The whole movie is so realistic that even The New York Times — a strong supporter of government-run health care — had to admit that the movie “absorbs you into its world”.

Thursday, July 05, 2012

Teaching Economics

via The American Spectator and The Spectacle Blog by Thomas Sowell on 7/5/12

Having taught economics at a number of colleges for a number of years, I especially welcomed a feature article in the June 22nd issue of the Chronicle of Higher Education, on how economics courses with the same name can be very different at different colleges. It can also be very different when the course is taught by professors in the same department who have different approaches.
The usefulness of the three approaches described in the article depends on what the introductory course is trying to accomplish.
One professor taught the subject through a steady diet of mathematical models. If the introductory economics course is aimed at those students who are going to major in economics, then that may make some sense. But most students in most introductory economics courses are not going to become economics majors, much less professional economists.
Among those students for whom a one-year introductory course is likely to be their only exposure to economics, mathematical models that they will probably never use in later life, as they try to understand economic activities and policies in the real world, may be of very limited value to them, if any value at all.
If the purpose of the introductory course is to serve as a recruiting source for economics majors, that serves the interest of the economics department, not the students. It may also serve the interests of the professor, because teaching in the fashion familiar in his own research and scholarship is a lot easier than trying to recast economics in terms more accessible to students who are studying the subject for the first time.
Having written two textbooks on introductory economics -- one full of graphs and equations, and the other with neither -- I know from experience that the second way is a lot harder to write, and is more time-consuming. The first book was written in a year; the second took a decade. The first book quickly went out of print. The second book ("Basic Economics") has gone through 4 editions and has been translated into 6 foreign languages.
Both books taught the same principles, but obviously one approach did so more successfully than the other. The same applies in the classroom.
The opposite extreme from teaching economics with mathematical models was described by a professor who uses an approach she characterized as democratizing the classroom, "so that everybody is a co-teacher and co-learner." This has sometimes been called "discovery learning," where the students discover the underlying principles for themselves while groping their way through problems.
Unfortunately, discovery can take a very long time -- much longer than a course lasts. It took the leading classical economists a hundred years of wrestling with different concepts of supply and demand -- often misunderstanding each other -- before finally arriving at mutually understood concepts that can now be taught to students in the first week of introductory economics.
The Chronicle of Higher Education reported that the discovery learning professor sometimes seemed to be the one doing most of the work in the class, "bringing the students' sometimes fumbling answers back to economic principles."
This course's main focus is said to be not on mastering the principles of economics, but being able to "dialog" and discuss "shades of gray." With such mushy goals and criteria, hard evidence is unlikely to rear its ugly head and spoil the pretty vision of discovery learning.
Discovery learning may not serve the interests of the students, but it may well serve the ego of its advocate. Education may be the only field of human endeavor where experiments always seem to succeed -- as judged by their advocates.
By contrast, the third method of teaching introductory economics, in lectures by Professor Donald Boudreaux of George Mason University, tests the students with objective questions -- which means that it is also producing a test of whether this traditional way of teaching actually works. Apparently it does.
The Chronicle of Higher Education also reported on the students. The feckless behavior of today's students in all three courses makes me glad that I left the classroom long ago, and do my teaching today solely through my writings.

Tuesday, July 03, 2012

Quoting Adam Smith Out of Context

Quoting Adam Smith Out of Context

via Ideas by David Friedman on 7/3/12

I just came across a blog which contained the following:

The rich should contribute to the public expense, not only in proportion to their revenue, but something more than that proportion.
Adam Smith, Wealth of Nations
 The actual quote is:
It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
Not only has the blogger removed without notice the first seven words of the sentence,  sharply changing its meaning, he has capitalized the word that starts his truncated sentence, thus pretending that what he is giving is the whole sentence.
Of course, the dishonesty is only in the blogger who first posted the supposed quote—various others seem to have copied it from him. I am not providing links to any of them, since I don't think they deserve the attention; readers who are curious should be able to find them easily enough.
I put a comment on one blog that had the quote, sourced to another. I'll see if the blogger is honest enough to let it show up. 
I've commented in the past on the practice of ascribing to Smith views he did not hold, such as support for public schooling and progressive taxation, supported by selective quotation. Most of those are probably honest errors by people who didn't actually read the text with any care, but this looks like deliberate dishonesty.

For those who are curious, what Smith is saying in the quote is that a particular tax, desirable on other grounds, should not be rejected just because it falls more heavily on the rich. His first maxim of taxation, however, at the beginning of the relevant section of the book, is that tax burden should be proportional to income.

Wimp Power: Some Quotations from Wind’s Critics

I like this one....

""Renewable energies once had a 100% market share, corresponding to mankind's energy poverty era."

– Rob Bradley, Institute for Energy Research"

via MasterResource by jdroz on 6/20/12

Energy and environmental issues need to be addressed using logic and scientific thinking, not emotion, wishes, and depiction.  On a realistic basis, industrial wind energy fails to deliver the goods. By this I mean that windpower:
1) Is not a technically sound solution to provide us electricity, or to meaningfully reduce global warming, and
2) Is not an economically viable source of energy on its own, and
3) Is not environmentally responsible
When you take away the wind lobbyists' fast-talking shenanigans, their con comes down to these two things: They are telling us what we want to hear, and we're not really verifying the truth of what they're saying.
The intellectual conjurers have a clever one-two marketing campaign. First we're told that the planet is facing imminent catastrophe. And then a salesman comes to our community with a solution! The spiel is that we can do something consequential to help prevent this global disaster — and we can create jobs doing it, and make some easy money in the process.
What a deal!
Wind magicians go into a rural community and carefully cultivate the idea that anything coming from them is found money. The trick is that it's not coming from them at all, as it's entirely paid by taxpayers and ratepayers.
Quotations from the Trenches
Realistic assessment is needed in the PR arena.  To this end, different bloggers at MasterResource provided some analogies to describe what wind power really is compared to consumer-chosen, market-proven energy.
"Wind energy can be likened to the wayward child. It's unavailable when needed, shows up when unexpected, and when it does arrive it often behaves erratically. As a result, wind cannot be relied on as a primary fuel source."
     – Lisa Linowes, Industrial Wind Action
"Even if windpower was cheaper (it is not), this energy source remains inferior. Consider a car for sale that has a trick motor. Wind's intermittency is the equivalent of not knowing if your car will start or will perform on the road."
     – Rob Bradley, Institute for Energy Research
"Wind energy resembles a marginal, government-subsidized 'worker', who sporadically shows up, usually at night, in a 24-hour convenience store, and promptly starts rearranging the displays at random, causing extra work for the other employees to maintain the store's attractiveness to customers, which raises the cost of operating the business, i.e., higher prices for goods and services, smaller wage increases, less profit and less taxes for governments."
     – Willem Post, project manager and energy consulting engineer
"Requiring wind energy on the grid is somewhat like placing mentally-deficient, a.k.a. special-education students, into a regular class. The extra catering detracts from the learning experience of all."
     – Willem Post, project manager and energy consulting engineer
"Modern society has advanced through a process of constantly improving efficiency and productivity. Wind power takes us backwards in every category of productivity. How futuristic is a modern energy source that is twice the cost and half the value of its competitors?"
     – Tom Tanton, T 2 & Associates
"Wind energy, providing energy and no reliable capacity, is akin to two-day-old beer with no foam."
     – Tom Tanton, T 2 & Associates
"Windpower is not David to coal's Goliath; rather, wind is David to coal's Bathsheba."
     – Jon Boone, Environmentalist and Documentary Producer
"Modern power is a time machine, not for moving back and forward in time, but rather expanding the time in which we can do other things. Archaic power vastly decreases the time available to do other work. Wind can only provide ancient power."
     – Jon Boone, Environmentalist and Documentary Producer
"The truth is that wind can only be a minor ingredient in a much larger fuel mix—but much like a fly in soup, which provides, like wind, problematic nutritional value. You could eat it, but why?"
     – Jon Boone, Environmentalist and Documentary Producer
"Wind power, promoted as a panacea, is really the new environmental blight. It kills on land, at sea, and in the air. There is No Safe Place for Industrial Wind."
     – Sherri Lange, North American Platform Against Wind Power
Re wind energy's dilutedness: "Its like trying to boil a pot of water with matches: not enough energy or power!!"
    – Dr. Mike Fox (40 years in the energy and nuclear fields)
In response to wind lobbyists incessant unsupported claims that more subsidies for them will create jobs:
"There is nothing – no program, no hobby, no vice, no crime — that does not 'create jobs'. Tsunamis, computer viruses and shooting convenience store clerks all 'create jobs'. So that claim misses the plot; it applies to all so is an argument in favor of none. Instead of an argument on the merits, it is an admission that one has no such arguments." 
- Chris Horner, Competitive Enterprise Institute
And don't forget that renewables are not our energy future but our (best-forgotten) energy past:
"Renewable energies once had a 100% market share, corresponding to mankind's energy poverty era."
     – Rob Bradley, Institute for Energy Research

You Don't Have to Support Universal Health Coverage to Support Caring for th...

via Hit & Run by Peter Suderman on 6/27/12

Liberals often accuse opponents of universal health coverage legislation of wanting to let the poor go without coverage — and suffer and die as a result. Let's be charitable and assume that liberals actually believe that this is the only possible alternative to universal coverage orchestrated by the government.
The problem, of course, is that it's not.
It is possible to oppose both the current fiscally rotten entitlement system and expansions of that system — like the 2010 health care overhaul now awaiting a Supreme Court decision — and still favor a basic safety net for the truly needy.
What might such a safety net look like? Here are a few basic principles.
It would focus effort and resources on providing care for the truly needy rather than on providing subsidies for seniors or the middle class. Right now we subsidize the health insurance of the middle and upper classes through the tax system, which has distorted the market for medical care for decades. The health care overhaul, should it stand, will add an additional layer of subsidies for households earning up to 400 percent of the poverty line, or nearly $90,000 for a family of four. Medicare is not means tested, and provides taxpayer-financed health coverage for the wealthiest cohort of Americans. It's a hefty transfer from the poor and young to the rich and old. Medicaid, meanwhile, is a deeply dysfunctional program that regularly fails the poor and, thanks in part to the perverse incentives of its joint financing system, is the subject of constant squabbling between state authorities and the federal government. American health care policy today offers lopsided benefits to politically influential groups like seniors at the expense of the poor and vulnerable.
It would do as little as possible to control prices or suppress price signals. Since World War II, medical prices have been systematically distorted and suppressed all over the Western world. As National Center for Policy Analysis president John Goodman extensively documents in his new book, Priceless: Curing the Health Care Crisis, individuals, employers, providers, and even payers — public and private — have been shielded from seeing the true costs of care, which has helped generate cost inflation and excess spending. A better health care system would be far more transparent to all parties, ensuring clear prices for specific services and service bundles throughout each layer of the system.
It would emphasize catastrophic coverage instead of subsidizing routine care. Rather than attempt to cover relatively predictable health expenses, a better safety net would focus on ensuring that health care expenses did not lead to financial ruin for the most needy. In other words, the focus would be on providing insurance against disaster rather than day-to-day comprehensive coverage, encouraging individuals to take responsibility for care that can reasonably be expected in advance while also offering some peace of mind that worst case scenarios are covered.
It would allow for flexibility and experimentation when possible. Because the price system has been suppressed for so long, and because so much of medical practice is directed or heavily influenced by government payment systems and regulations, any system would have to emphasize freeing providers and patients to experiment with new models of care, payment, and administrative practice. Experimentation should be locally driven rather than centrally planned, and, whenever possible, should not require obtaining advance permission, which tends to give competitors an opening to block competition. It would also need to free state and local governments to experiment with competing public health policies.
Would a system based on these principles be perfect? No, not even close. But it would provide more effective help to the truly needy while allowing and encouraging the sort of market-driven innovations that are desperately needed in the health care sector. Perfect, anyway, is not possible. It is unfortunate but true that people slip through the cracks in universal systems all over the first world: Cancer patients fight for access to treatments in the United Kingdom's politically driven socialized health care system; Canadians in excruciating but not-quite-life-threatening pain wait months for treatment and cost the country billions in productivity losses. Coverage, as we have also seen in the U.S., is not always a guarantee of care. It is not necessary to support government-driven universal coverage in order to support finding more sustainable and effective ways to care for those who need it most.
The Mercatus Center's Tyler Cowen laid out some suggested principles for supporters of free-market health care here. Reason's Nick Gillespie and Veronique de Rugy make the case against the current entitlement system in the cover story of Reason's August/September print edition, which is currently on newsstands. So subscribe now!

Monday, July 02, 2012

Jonathan Haidt: He Knows Why We Fight

From the Weekend Interview -- Wall Street Journal


Jonathan Haidt: He Knows Why We Fight

Conservative or liberal, our moral instincts are shaped by evolution to strengthen 'us' against 'them.'


Nobody who engages in political argument, and who isn't a moron, hasn't had to recognize the fact that decent, honest, intelligent people can come to opposite conclusions on public issues.
Jonathan Haidt, in an eye-opening and deceptively ambitious best seller, tells us why. The reason is evolution. Political attitudes are an extension of our moral reasoning; however much we like to tell ourselves otherwise, our moral responses are basically instinctual, despite attempts to gussy them up with ex-post rationalizations.
Our constellation of moral instincts arose because it helped us to cooperate. It helped us, in unprecedented speed and fashion, to dominate our planet. Yet the same moral reaction also means we exist in a state of perpetual, nasty political disagreement, talking past each other, calling each other names.
So Mr. Haidt explains in "The Righteous Mind: Why Good People Are Divided by Politics and Religion," undoubtedly one of the most talked-about books of the year. "The Righteous Mind" spent weeks on the hardcover best-seller list. Mr. Haidt considers himself mostly a liberal, but his book has been especially popular in the conservative blogosphere. Some right-leaning intellectuals are even calling it the most important book of the year.
It's full of ammunition that conservatives will love to throw out at cocktail parties. His research shows that conservatives are much better at understanding and anticipating liberal attitudes than liberals are at appreciating where conservatives are coming from. Case in point: Conservatives know that liberals are repelled by cruelty to animals, but liberals don't think (or prefer not to believe) that conservatives are repelled too.
Mr. Haidt, until recently a professor of moral psychology at the University of Virginia, says the surveys conducted by his research team show that liberals are strong on evolved values he defines as caring and fairness. Conservatives value caring and fairness too but tend to emphasize the more tribal values like loyalty, authority and sanctity.
Conservatives, Mr. Haidt says, have been more successful politically because they play to the full spectrum of sensibilities, and because the full spectrum is necessary for a healthy society. An admiring review in the New York Times sums up this element of his argument: "Liberals dissolve moral capital too recklessly. Welfare programs that substitute public aid for spousal and parental support undermine the ecology of the family. Education policies that let students sue teachers erode classroom authority. Multicultural education weakens the cultural glue of assimilation."
Such a book is bound to run into the charge of scientism—claiming scientific authority for a mix of common sense, exhortation or the author's own preferences. Let it be said that Mr. Haidt is sensitive to this complaint. If he erred, he says, it was on the side of being accessible, readable and, he hopes, influential.
As we sit in his new office at New York University, he professes an immodest aim: He wants liberals and conservatives to listen to each other more, hate each other less, and to understand that their differences are largely rooted in psychology, not open-minded consideration of the facts. "My big issue, the one I'm somewhat evangelical about, is civil disagreement," he says.
A shorthand he uses is "follow the sacred"—and not in a good way. "Follow the sacred and there you will find a circle of motivated ignorance." Today's political parties are most hysterical, he says, on the issues they "sacralize." For the right, it's taxes. For the left, the sacred issues were race and gender but are becoming global warming and gay marriage.
Yet between the lines of his book is an even more dramatic claim: The same moral psychology that makes our politics so nasty also underlies the amazing triumph of the human species. "We shouldn't be here at all," he tells me. "When I think about life on earth, there should not be a species like us. And if there was, we should be out in the jungle killing each other in small groups. That's what you should expect. The fact that we're here [in politics] arguing viciously and nastily with each other, and no guns, that itself is a miracle. And I think we can make [our politics] a little better. That's my favorite theme."
Who is Jon Haidt? A nice Jewish boy from central casting, he grew up in Scarsdale, N.Y. His father was a corporate lawyer. "When the economy opened out in the '50s and '60s and Jews could go everywhere, he was part of that generation. He and all his buddies from Brooklyn did very well."
His family was liberal in the FDR tradition. At Yale he studied philosophy and, in standard liberal fashion, "emerged pretty convinced that I was right about everything." It took a while for him to discover the limits of that stance. "I wouldn't say I was mugged by reality. I would say I was gradually introduced to it academically," he says today.
In India, where he performed field studies early in his professional career, he encountered a society in some ways patriarchal, sexist and illiberal. Yet it worked and the people were lovely. In Brazil, he paid attention to the experiences of street children and discovered the "most dangerous person in the world is mom's boyfriend. When women have a succession of men coming through, their daughters will get raped," he says. "The right is right to be sounding the alarm about the decline of marriage, and the left is wrong to say, 'Oh, any kind of family is OK.' It's not OK."
At age 41, he decided to try to understand what conservatives think. The quest was part of his effort to apply his understanding of moral psychology to politics. He especially sings the praises of Thomas Sowell's "Conflict of Visions," which he calls "an incredible book, a brilliant portrayal" of the argument between conservatives and liberals about the nature of man. "Again, as a moral psychologist, I had to say the constrained vision [of human nature] is correct."
That is, our moral instincts are tribal, adaptive, intuitive and shaped by evolution to strengthen "us" against "them." He notes that, in the 1970s, the left tended to be categorically hostile to evolutionary explanations of human behavior. Yet Mr. Haidt, the liberal and self-professed atheist, says he now finds the conservative vision speaks more insightfully to our evolved nature in ways that it would be self-defeating to discount.
"This is what I'm trying to argue for, and this is what I feel I've discovered from reading a lot of the sociology," he continues. "You need loyalty, authority and sanctity"—values that liberals are often suspicious of—"to run a decent society."
Mr. Haidt, a less chunky, lower-T version of Adam Sandler, has just landed a new position at the Stern School of Business at NYU. He arrived with his two children and wife, Jane, after a successful and happy 16-year run at the University of Virginia. An introvert by his own account, and never happier than when laboring in solitude, he nevertheless sought out the world's media capital to give wider currency to the ideas in the "The Righteous Mind."

Mr. Haidt's book, as he's the first to notice, has given comfort to conservatives. Its aim is to help liberals. Though he calls himself a centrist, he remains a strongly committed Democrat. He voted for one Republican in his life—in 2000 crossing party lines to cast a ballot for John McCain in the Virginia primary. "I wasn't trying to mess with the Republican primary," he adds. "I really liked McCain."

His disappointment with President Obama is quietly evident. Ronald Reagan understood that "politics is more like religion than like shopping," he says. Democrats, after a long string of candidates who flogged policy initiatives like items in a Wal-Mart circular, finally found one who could speak to higher values than self-interest. "Obama surely had a chance to remake the Democratic Party. But once he got in office, I think, he was consumed with the difficulty of governing within the Beltway."
The president has reverted to the formula of his party—bound up in what Mr. Haidt considers obsolete interest groups, battles and "sacred" issues about which Democrats cultivate an immunity to compromise.
Mr. Haidt lately has been speaking to Democratic groups and urging attachment to a new moral vision, albeit one borrowed from the Andrew Jackson campaign of 1828: "Equal opportunity for all, special privileges for none."
Racial quotas and reflexive support for public-sector unions would be out. His is a reformed vision of a class-based politics of affirmative opportunity for the economically disadvantaged. "I spoke to some Democrats about things in the book and they asked, how can we weaponize this? My message to them was: You're not ready. You don't know what you stand for yet. You don't have a clear moral vision."
Like many historians of modern conservatism, he cites the 1971 Powell Memo—written by the future Supreme Court Justice Lewis Powell Jr.—which rallied Republicans to the defense of free enterprise and limited government. Democrats need their own version of the Powell Memo today to give the party a new and coherent moral vision of activist government in the good society. "The moral rot a [traditional] liberal welfare state creates over generations—I mean, the right is right about that," says Mr. Haidt, "and the left can't see it."
Yet one challenge becomes apparent in talking to Mr. Haidt: He's read his book and cheerfully acknowledges that he avoids criticizing too plainly the "sacralized" issues of his liberal friends.
In his book, for instance, is passing reference to Western Europe's creation of the world's "first atheistic societies," also "the least efficient societies ever known at turning resources (of which they have a lot) into offspring (of which they have very few)."
What does he actually mean? He means Islam: "Demographic curves are very hard to bend," he says. "Unless something changes in Europe in the next century, it will eventually be a Muslim continent. Let me say it diplomatically: Most religions are tribal to some degree. Islam, in its holy books, seems more so. Christianity has undergone a reformation and gotten some distance from its holy books to allow many different lives to flourish in Christian societies, and this has not happened in Islam."
Mr. Haidt is similarly tentative in spelling out his thoughts on global warming. The threat is real, he suspects, and perhaps serious. "But the left is now embracing this as their sacred issue, which guarantees that there will be frequent exaggerations and minor—I don't want to call it fudging of data—but there will be frequent mini-scandals. Because it's a moral crusade, the left is going to have difficulty thinking clearly about what to do."
Mr. Haidt, I observe, is noticeably less delicate when stepping on the right's toes. He reviles George W. Bush, whom he blames for running up America's debt and running down its reputation. He blames Newt Gingrich for perhaps understanding his book's arguments too well and importing an uncompromising moralistic language into the partisan politics of the 1990s.
Mr. Haidt also considers today's Republican Party a curse upon the land, even as he admires conservative ideas. He says its defense of lower taxes on capital income—mostly reported by the rich—is indefensible. He dismisses Mitt Romney as a "moral menial," a politician so cynical about the necessary cynicism of politics that he doesn't bother to hide his cynicism. (Some might call that a virtue.) He finds it all too typical that Republicans abandoned their support of the individual health-care mandate the moment Mr. Obama picked it up (though he also finds Chief Justice John Roberts's bend-over-backwards effort to preserve conservative constitutional principle while upholding ObamaCare "refreshing").
Why is his language so much less hedged when discussing Republicans? "Liberals are my friends, my colleagues, my social world," he concedes. Liberals also are the audience he hopes most to influence, helping Democrats to recalibrate their political appeal and their attachment to a faulty welfare state.
To which a visitor can only say, God speed. Even with his parsing out of deep psychological differences between conservatives and liberals, American politics still seem capable of a useful fluidity. To make progress we need both parties, and right now we could use some progress on taxes, incentives, growth and entitlement reform.
Mr. Jenkins writes the Journal's Business World column.



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